Economic Survey: IT Sector Hiring Unlikely To Pick Up Significantly

Hiring in the information technology sector slowed down considerably in the last financial year and even if the recruitment does not decline further, it is unlikely to pick up significantly, according to the Economic Survey 2023–24.

However, exports of business, consultancy and IT-enabled services can expand by leveraging the initiatives taken by the government and capturing the untapped potential in emerging markets, according to the survey that was released on Monday on the eve of the Union Budget.

Hiring in the IT industry has been muted in 2024, and the employee count of Infosys Ltd., Tata Consultancy Services Ltd., HCL Technologies Ltd. and other major companies has also declined after a long time in the sector. However, the hiring outlook has turned positive in the current fiscal.

In 2024–25, Infosys has said recently that it would hire 15,000–20,000 freshers, which is around 50,000 less as compared to fiscal 2023. Wipro, which hired 30,000 freshers in 2022–23, is hiring up to 12,000 freshmen in the current fiscal. HCLTech, which hired 45,000 freshers in fiscal 2023, is hiring 10,000 freshers in 2024–25. 

The survey said IT and business services would likely retain their prominent international presence in the medium term. However, studies suggest that the application of artificial intelligence would likely restrain the growth opportunities for business services progressively and, therefore, pose a challenge for long-term sustainability and job creation. "Thus, focusing on human capital to take advantage of the agglomeration effects of large, well-functioning cities is critical for the growth of services, especially those with global market potential."

Over the past decade, information and computer-related services have become increasingly significant, with their share in the total gross value added expanding from 3.2% in fiscal 2013 to 5.9% in fiscal 2023. Despite the pandemic-induced economic downturn, this sector achieved a real growth rate of 10.4% in fiscal 2021, according to the survey.

The Covid pandemic expedited the advancement and uptake of technology-driven solutions, fueling the growth of this sector. IT and IT-enabled services have been instrumental in maintaining the country's external balance through export earnings, which are set to increase further. The flourishing growth of IT services has also supported the expansion of global capability centres and the tech startup ecosystem in India, it said.